NEW DELHI: The completion of a significant share sale by the Indian conglomerate’s flagship firm failed to allay larger worries brought on by a US short seller’s alleged fraud. As a result, a selloff in Adani Group’s equities accelerated on Wednesday.
Early trading in Mumbai saw falls in nine out of the ten companies linked to billionaire Gautam Adani, with Adani Total Gas Ltd. leading the way with a daily limit 10% decrease. Tuesday’s follow-on equity offering for $2.5 billion by Adani Enterprises Ltd. resulted in a 3.2% loss.
The falls demonstrate that Adani Enterprises’ most recent fundraising effort is insufficient to win back investor trust in the wake of US short seller Hindenburg Research’s damning report, which caused the group’s equities to lose more than $70 billion in market value. A sustained decline in the group’s stock price might harm public opinion of India, which until recently was a popular investment destination for Wall Street.
“We need to wait and see what happens. They have undoubtedly located investors, but the worries of Hindenburg Research have not been addressed, according to Smartkarma analyst Brian Freitas.
Contrarily, the credit market seems to have welcomed the fundraising achievement, as gains were extended into a second day for nearly all of the dollar bonds issued by the Adani group of enterprises.
The largest follow-on share sale ever conducted in India by Adani Enterprises was completely subscribed on the penultimate day thanks to a spike in demand from institutional investors. Adani was trying to attract retail investors, but there was noticeably little interest from them.
Later on Wednesday, the company is anticipated to reveal the exact pricing for the sale.
